In a nutshell, United Airlines screwed up and the customer service representative dealing with the problem refused to do the right thing for the customer. I’ve had similar experiences time and time again, and it is the primary reason that I am constantly searching for providers of all kinds who will treat me better than the communications company, bank, technology provider, regulated utility, retailer, or government agency I am currently stuck with.

Usually when I get mistreated by a big company I don’t blame the customer service rep who refused to help. I assume that that person is stuck with the rules, training, supervision, and other constraints imposed on them by their company. I try to avoid blaming the rep, but I always encourage the person to pass along to his or her masters the reason for my dissatisfaction with their company. Most big companies have people who sit around a table and discuss why their customers leave them, and I always have hopes that if enough feedback filters up from the front line, it might make a difference in the way the company treats its customers.

In short, my message to big companies is: Empower your front-line people to do the right thing for your customer.

I’ve been working hard to be more courteous when speaking by telephone with customer representatives. As part of that effort, I’ve been reflecting on what drives me to be rude and sarcastic.

One important factor is that I rarely call up some large company for a happy purpose — it’s almost always a problem. Whatever has happened — a billing error, a product failure, a problem with an order — 90 percent of the time, it’s the company’s screw-up.

So, when I have to call customer support, it’s an interruption to my work, and I’m already primed for conflict. The pressure to respond with asperity mounts to the extent that the customer-service experience stinks — having to navigate through phone-menu options none of which apply, having to wait on hold, encountering a representative who can’t help me with the problem or is poorly trained or is not empowered by the company to do the right thing for the customer.

Fortunately, I’m usually able to maintain enough perspective to recognize that the customer representative is usually as much a victim of the company’s abysmal approach to customer experience as I am. Like most of us, the rep is just a poor soul trying to make a living within the limits of the reality they are presented with. Unless the rep is as incompetent or uninterested in the customer as their employer is — in such case, the individual might warrant some castigation.

I often take the opportunity of the interaction to ask the representative to pass along my feedback about what is wrong with their company’s customer relations. Like throwing a stone into the ocean, but who knows, someone might listen.

I would have to say that most of the time my experience with telephone customer service is negative, but normally that doesn’t justify mistreating the human being who is trying to help me.

Green’s article is inspired by the recent announcement that the members of the Grateful Dead would be donating their archives to the University of California at Santa Cruz. UCSC will be using the archives to create extensive publicly-available resources. The institution is currently processing the materials, but you can read about their progress at The Grateful Dead Archive. Initial materials from the archive are on exhibit now through July 4, 2010, at the New-York Historical Society — see “Grateful Dead: Now Playing at the New-York Historical Society.”

Green reviews the curious and controversial history of academic scholarship focused on the Grateful Dead but highlights an interesting truth of the Dead’s story — they were and are a very successful business, and much of that is due to their enlightened focus on providing customer value. Green writes that,

Without intending to—while intending, in fact, to do just the opposite—the band pioneered ideas and practices that were subsequently embraced by corporate America. One was to focus intensely on its most loyal fans. It established a telephone hotline to alert them to its touring schedule ahead of any public announcement, reserved for them some of the best seats in the house, and capped the price of tickets, which the band distributed through its own mail-order house. If you lived in New York and wanted to see a show in Seattle, you didn’t have to travel there to get tickets—and you could get really good tickets, without even camping out. “The Dead were masters of creating and delivering superior customer value,” Barry Barnes, a business professor at the H. Wayne Huizenga School of Business and Entrepreneurship at Nova Southeastern University, in Florida, told me….

As Barnes and other scholars note, the musicians who constituted the Dead were anything but naive about their business. They incorporated early on, and established a board of directors (with a rotating CEO position) consisting of the band, road crew, and other members of the Dead organization. They founded a profitable merchandising division and, peace and love notwithstanding, did not hesitate to sue those who violated their copyrights. But they weren’t greedy, and they adapted well. They famously permitted fans to tape their shows, ceding a major revenue source in potential record sales. According to Barnes, the decision was not entirely selfless: it reflected a shrewd assessment that tape sharing would widen their audience, a ban would be unenforceable, and anyone inclined to tape a show would probably spend money elsewhere, such as on merchandise or tickets. The Dead became one of the most profitable bands of all time.

With physical goods, there is a direct correlation between scarcity and value. Gold is more valuable than wheat, even though you can’t eat it. While this is not always the case, the situation with information is often precisely the reverse. Most soft goods increase in value as they become more common. Familiarity is an important asset in the world of information. It may often be true that the best way to raise demand for your product is to give it away….

In regard to my own soft product, rock ‘n’ roll songs, there is no question that the band I write them for, the Grateful Dead, has increased its popularity enormously by giving them away. We have been letting people tape our concerts since the early seventies, but instead of reducing the demand for our product, we are now the largest concert draw in America, a fact that is at least in part attributable to the popularity generated by those tapes.

True, I don’t get any royalties on the millions of copies of my songs which have been extracted from concerts, but I see no reason to complain. The fact is, no one but the Grateful Dead can perform a Grateful Dead song, so if you want the experience and not its thin projection, you have to buy a ticket from us. In other words, our intellectual property protection derives from our being the only real-time source of it.

I think a key insight from the Grateful Dead case study is that a successful business ultimately has to rest on customer relationships. Interactive media and technologies place unprecedented control in the hands of customers, and the smart business these days is the one that realizes that the success of its brand will rest on its customer experience.

In the Atlantic article, Barlow tells Green,

What people today are beginning to realize is what became obvious to us back then—the important correlation is the one between familiarity and value, not scarcity and value. Adam Smith taught that the scarcer you make something, the more valuable it becomes. In the physical world, that works beautifully. But we couldn’t regulate [taping at] our shows, and you can’t online. The Internet doesn’t behave that way. But here’s the thing: if I give my song away to 20 people, and they give it to 20 people, pretty soon everybody knows me, and my value as a creator is dramatically enhanced. That was the value proposition with the Dead.